Comment on "Announced lay-offs: Their effect on corporate financial performance"

The impact of employee lay‐offs on business performance is of great concern to human resource managers as well as to the wider community. In a recent article by De Meuse, Vanderheiden, and Bergmann, published data are analyzed to determine whether announced lay‐offs lead to improved financial performance. Their results support the view that from the standpoint of business performance, lay‐offs are ill‐advised. The methodology used, however, as it does not consider risk, reduces the significance of their findings. Accepted financial theory, moreover, suggests an alternative explanation of their results. © 1999 John Wiley & Sons, Inc.